F-1/A: Ten-League International Holdings Eyes Nasdaq Listing with $11.2 Million IPO

Ten-League International Holdings, a Singapore-based turnkey project solutions provider, is planning an initial public offering on the Nasdaq Capital Market to raise approximately $11.2 million.

Summary

• Ten-League International Holdings Limited is pursuing an initial public offering (IPO) to list its ordinary shares on the Nasdaq Capital Market.
• The company aims to raise approximately $11.2 million through the IPO, offering 1,607,840 ordinary shares.
• Selling shareholders, Ten-League Corp and Jules Verne, are offering an additional 632,160 ordinary shares.
• The anticipated initial public offering price is between $4.00 and $5.00 per share.
• Upon completion of the offering, the company's issued and outstanding shares will total 29,404,342 ordinary shares.
• Ten-League Corp will retain approximately 80.32% ownership, granting Mr. Lim Jison control over shareholder approvals.
• The company intends to allocate the net proceeds to expand product offerings (30%), improve automation (15%), strategic acquisitions (15%), repay bank borrowing (10%), marketing (10%), and working capital (balance).

Sentiment

Score: 6

Explanation: The document presents a balanced view, highlighting both the opportunities and risks associated with the IPO. While the company has a solid track record and growth plans, it also faces significant challenges and uncertainties.

Positives

• The IPO will provide capital for expansion and strategic initiatives.
• Listing on Nasdaq could increase visibility and access to capital markets.
• The company has a clear plan for utilizing the IPO proceeds.

Negatives

• Existing shareholders will experience dilution due to the issuance of new shares.
• The company will be a controlled company post-IPO, potentially limiting shareholder influence.
• The company is dependent on SANY, and the loss of this relationship could have a material adverse impact on the company's financial condition and results of operations.

Risks

• The company is dependent on SANY, and the loss of this relationship could have a material adverse impact on the company's financial condition and results of operations.
• The company operates in a competitive environment and faces competition from existing and new industry players.
• The company is dependent on foreign labor and may face labor shortages or increased costs of labor for its Singapore operations.
• The company is dependent on the level of activities in the construction and infrastructure, civil engineering and foundation industries.
• The company does not have long term contracts with its customers.
• The company is dependent on the timely delivery of the heavy equipment and other products which it distributes.
• The company may experience work safety-related accidents that may expose it to liability claims.
• The company's rental fleet is subject to residual value risk upon disposition.
• If the company's rental fleet ages, its operating costs may increase, it may be unable to pass along such costs, and its earnings may decrease.
• The company incurs maintenance and repair costs associated with its rental fleet equipment that could have a material adverse effect on its business in the event these costs are greater than anticipated.
• Climate change, climate change regulations and greenhouse effects may materially adversely impact the company's operations and markets.
• The company may require additional funding for its future growth and is dependent on financing to fund its purchase of equipment for its Equipment Rental Business.
• The company may be exposed to risks associated with joint ventures or strategic alliances.
• The company may be affected by any adverse impact on its reputation and goodwill.
• Adverse conditions in the global financial markets and the general economy may adversely affect the company's business, financial condition, results of operations and prospects.
• The company cannot assure you that its future plans will be successful.
• An active trading market for the company's ordinary shares may not be established or, if established, may not continue and the trading price for the company's ordinary shares may fluctuate significantly.
• The company may not maintain the listing of its ordinary shares on the Nasdaq which could limit investors ability to make transactions in the company's ordinary shares and subject the company to additional trading restrictions.
• The sale or availability for sale of substantial amounts of the company's ordinary shares could adversely affect the market price.
• Because the company's public offering price per share is substantially higher than its net tangible book value per share, you will experience immediate and substantial dilution.
• You must rely on the judgment of the company's management as to the uses of the net proceeds from this offering, and such uses may not produce income or increase the company's share price.
• If securities or industry analysts do not publish research or reports about the company's business, or if they adversely change their recommendations regarding the company's ordinary shares, the market price for the company's ordinary shares and trading volume could decline.
• If the company is classified as a passive foreign investment company, United States taxpayers who own the company's securities may have adverse United States federal income tax consequences.
• As a company incorporated in the Cayman Islands, the company is permitted to adopt certain home country practices in relation to corporate governance matters that differ significantly from Nasdaq corporate governance listing standards. These practices may afford less protection to shareholders than they would enjoy if the company complied fully with Nasdaq corporate governance listing standards.
• You may face difficulties in protecting your interests, and your ability to protect your rights through U.S. courts may be limited, because the company is incorporated under Cayman Islands law.
• If the company fails to implement and maintain an effective system of internal controls, it may be unable to accurately or timely report its results of operations or prevent fraud, and investor confidence and the market price of the company's ordinary shares may be materially and adversely affected.
• Shareholders of Cayman Islands exempted companies like the company have no general rights under Cayman Islands law to inspect corporate records or to obtain copies of lists of shareholders of these companies.
• Economic substance legislation of the Cayman Islands may impact the company or its operations.
• Certain judgments obtained against the company by its shareholders may not be enforceable.
• The company is an emerging growth company within the meaning of the Securities Act and may take advantage of certain reduced reporting requirements.
• The company is a foreign private issuer within the meaning of the Exchange Act, and as such it is exempt from certain provisions applicable to United States domestic public companies.
• The company may lose its foreign private issuer status in the future, which could result in significant additional costs and expenses to the company.
• The company will incur significantly increased costs and devote substantial management time as a result of the listing of its ordinary shares on the Nasdaq.
• If the company fails to meet applicable listing requirements, Nasdaq may delist its shares from trading, in which case the liquidity and market price of its shares could decline.

Future Outlook

The company intends to expand its product offerings, improve automation, pursue strategic acquisitions, and build its brand.

Industry Context

The company operates in the heavy equipment industry, serving the port, construction, civil engineering, and underground foundation sectors in Singapore. The industry is influenced by government support, urban development, and the trend towards electrification.

Comparison to Industry Standards

• The company competes with other industry players on reputation, track record, pricing, product range, delivery times, and customer service.
• The company's reliance on SANY is a key aspect of its supply chain, similar to other companies that rely on major suppliers.
• The company's strategy to offer more environmentally friendly heavy equipment aligns with the industry trend towards electrification.

Legal Proceedings

• In November 2023, Ten-League (E&T) received a court filing by the liquidator of one of our machinery suppliers, or the Plaintiff, which has been subject to a winding-up order since November 2022 due to insolvency.
• The liquidator alleges that it sold us ten sets of machineries and equipment, or the Disputed Machineries, during its liquidation, which would render the transactions void.
• The total amount claimed by the liquidator is approximately S$4.2 million.
• In August 2024, the above proceeding concluded with the court ordering that the transactions for the sale of the Disputed Machineries be validated and dismissing the Plaintiffs claim for payment from Ten-League (E&T).

Related Party Transactions

• The company has engaged in related party transactions with Ten-League Corp, Merrimack Pte. Ltd., Merrimack Foundation Pte. Ltd., and Ten-League Green Energy Pte Ltd.

Stakeholder Impact

• Shareholders will experience dilution but may benefit from increased company value and liquidity.
• Employees may benefit from company growth and expansion.
• Customers may benefit from expanded product offerings and improved services.
• Suppliers may benefit from increased business volume.

Next Steps

• Complete the IPO process and list ordinary shares on the Nasdaq Capital Market.
• Execute plans for utilizing the net proceeds from the offering.
• Monitor and manage risks outlined in the Risk Factors section.

Key Dates